Where should you invest your money?
Buying investment properties instead of putting your money in the bank may be a better option; let’s face it we are not “building” more land and people will always need a place to live. Real estate will always have value. You may be uncertain about your money being in a bank, so an investment property could be your answer. An investment property may have a cap rate that is higher than what is offered through the bank. A cap rate is the return on your investment (valued after the expenses and taxes are paid, also known as the Net Operating Income). This can equal a higher rate of return than if your money was sitting in the bank.
In the long term, there is generally a positive cash flow from having investment properties. It is a passive income that you will consistently have and a tax write off. Your property will develop equity, while someone else is paying the mortgage, when you lease it out. Owning an investment property allows you the ability to 1031 exchange up, meaning you have the ability to purchase an equal or higher priced property deferring your capital gains. This allows for you to move up to bigger investments, building a portfolio and maintaining a higher return than keeping your money in the bank. By following this simple phrase, you can build your own personal wealth, “I am actively pursuing passive income.”
Everything sounds great…where do you begin?
Making the right investment may require that you seek our professional Real Estate experience. We are here to ensure that you make the right investment decision, whether the investment property is a multi-residential or commercial property. We know how the numbers work and can guide you through the process. Looking for equity and good neighborhoods, you will pay a higher Gross Rent Multiplier (based on the location). The GRM is a standard formula used throughout the industry. These are numbers that we can guide you with. The lower the GRM, the higher the return on the investment.
Yes, we know it sounds a bit complicated, however when you come to us we can simplify and identify the best investment for your particular needs and future goals.