The Power of Leverage: |
Real estate investing is, in our opinion, the best way by far to leverage your investment dollars. With most other types of investments, such as stocks, you have to put up the entire amount, and your fortunes rise and fall directly with the value of the invested amount.
For example, if you buy some stock for $10,000 and it increases in value to $20,000, you have doubled your money, or reaped a 100% return on investment (less administrative costs). With residential real estate investing, in the 1-4 unit space, you typically put down 25%. So buying a $400,000 property, you would have to put down $100,000. If it doubled in value over, say, 10 years, the property value would have increased 100%. If you sell it then for $800,000, your gross gain is $400,000, which is a 400% return on your original investment of $100,000 (ignoring escrow and other costs for simplification). Which would you rather have: a 100% return, or a 400% return? |
Feel free to contact us to get started on your path to real estate investing success.
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