05: Should You Invest in Residential Real Estate?

You own a real asset that does not fluctuate on a day to day basis depending on the “mood of the market”.

People have to live somewhere. This is level 2 on Maslow’s hierarchy of needs. Residential real estate is an investment in something people need.

There are substantial tax advantages that make most profits tax free. This IS NOT the case if you invest in a REIT so I personally do not recommend that.

Although the IRS considers your property to depreciate (therefore giving you tax advantages), the property will actually appreciate in most cases over time.

Your tenants pay down your mortgage. So…while you are collecting money on a monthly basis, your equity position in the property increases over time making your over-all yield higher than simply the cash that you are seeing on a monthly basis.

You can use leverage…a mortgage to buy an asset and enjoy leveraged appreciation and amplified cash flow.

Millennials are not buying houses. They prefer to rent. They are the LARGEST generation.

You can invest in one of many “turn-key” services in various parts of the country essentially eliminating your risk of tenants, toilets, and termites on a daily basis.

You can invest passively on bigger projects, get great returns, and still enjoy the cash flow and tax benefits as a limited partner without any legal exposure at all!

Unlike money in the stock market, rental properties do not vanish over-night because of something completely related to your property.