Why is Real Estate such a great investment? It's because of the flexibility of it four potential benefits.
Think about this, how many investments are out there that give you the potential of monthly cash flow, having your investment paid by for by somebody else, gives you tax savings and benefits if you qualify and has the potential of increasing in value?
Well if you think about it, there are not very many. That's why so many people who have achieved wealth have done it in real estate.
The best thing about investing in real estate is that you can choose what you buy and the way you buy it. What I mean by this is you pick the type of property, the location, the condition and you determine the price that you are willing to pay. How great is that?
If you want more cash flow, you could buy more units or arrange the financing so that the rental real estate produces more cash flow.
If you want to get the property paid for quicker you could use any excess cash flow and apply it to the loans.
If you want to reduce your taxes, you can use a benefit called depreciation to offset your income.
If you want big chunks of cash you could focus on appreciation. You could buy undervalued properties and sell them for a higher value or you could buy properties, fix them up and sell them for a higher price.
It's amazing how many ways you can make money by investing in real estate when you understand the four benefits. The key is to make sure that you have set up a way to measure your results and to see if you are maximizing the benefits that you want.
You can measure your results by using a Excel spreadsheet. Make it easy to understand and easy to use and you'll be amazed how fast you can see what benefits the real estate is providing you. You should use a tool like this before you buy, during your ownership and when you considering selling. I've created a simple one called the real estate analyzer that is available at http://landlordtools.com/landlord-software.htm. By either creating your own spreadsheet or using one that is already made, you will now become an investor that understand how to make any real estate investment work for you.
Copyright 2006 David Schneider
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