Real Estate – A Portfolio Must Have

Investment Real Estate is a phenomenal way to build wealth when executed correctly. The keyword is ‘correctly’ as there are many variables that will directly effect your investment and risk should be mitigated whenever possible.

Real Estate is a must have commodity for any investment portfolio. Why real estate over precious metals or energy? Simple: There are too many variables influencing the prices of both. Technology can quickly impact the efficiency in which these metals are mined and then boom! Like oil, we’re in an over supply scenario driving prices down. Speaking of energy, remember when the world decided oil was dead? Well, for the last 12,000 years having a roof over your head has always been a thing.

One of my favorite investors is known for always having a plan b. He says, “I never invest without insurance” but he’s not talking about an insurance policy…

What you should consider when investing in real estate:

• Capitalization Rate
• Local/Planned Development
• The Local Economy
• Real Estate Market Analysis
• Income to Debt Ratio
• Condition of Asset
• Financial Assessment and Planning of desired Asset
• ‘Plan B’

Benefits of Investment Real Estate:

• Fixed* Income Asset
• Reduce Tax Burden
  • Interest Expense
  • Depreciation of 3.636%
• Equity Appreciation

Costs of Investment Real Estate:

• Liquidity Demand – Maintenance
• Active Management of Asset(s)